Added to Your Shopping Cart Add to cart Description More now than ever before, auditing is in the spotlight; legislators, regulators, and top executives in all types of businesses realize the importance of auditors in the governance and performance equation. Previously routine and formulaic, internal auditing is now high-profile and high-pressure! Being an auditor in today's complex, highly regulated business environment involves more than crunching the numbers and balancing the books-it requires ensuring that appropriate checks and balances are in place to manage risk throughout the organization.
What is a successful audit? A good measure is whether both audit management and the auditee feel good about the Audit planning results. Benjamin Franklin famously said: Too often, audit staff commitments to current engagements become an obstacle to planning the next engagement.
I would submit that delaying an audit is preferable to not investing the proper amount of time into planning for it.
So what, exactly, comprises effective internal audit planning? I would say the following activities are key components: Research the Audit Area It is essential to understand the business process or function to be audited. If not familiar with it, thoroughly Audit planning the process or function to fully understand the subject matter.
Review internal procedures, search the internet for resources, and seek help from subject matter experts. Maintain Open Communications Throughout the Planning Process The sooner the audit team reaches out to the auditee, the better.
There is a certain amount of trepidation involved in any audit. Working with an auditee prior to the audit helps ease concerns the auditee may have. Communicating in person is always preferable. If this is not possible, telephone calls are the next best thing. Avoid communicating by email if possible.
Interested in learning more about this topic and other similar ones? Conduct Process Walk-Throughs Armed with a working understanding of the process or function, conduct a face-to-face walk through with the auditee.
Identify key business objectives, methods employed to meet objectives, and applicable rules or regulations. A walkthrough may include a tour of facilities. You may gather background information relative to the nature, purpose, volume, size, or complexity of automated systems, processes, or organizational structure.
You might scan documents or records for general condition. All these activities provide opportunities to interface with the auditee and build rapport before the formal entrance conference.
Map Risks to the Organization, Process, or Function Ask the auditee what his concerns are, what "keeps him up at night.
Rate risks with the auditee based on probability of occurrence and potential impact. Consider control design, gaps, or mitigating factors to determine if the control system effectively mitigates risks.
Obtain Data Prior to Fieldwork This has become a principal focus for us recently. We emphasize data in our initial requests for information. We perform data analytics before we begin field work. Identifying anomalies to confirm a condition or weakness early helps us target testing and optimize sample selections.
Results of Improved Audit Planning Our emphasis on audit planning has yielded worthwhile results. And I will say improving audit planning has been an investment.
We now begin our audit planning eight weeks prior to the Entrance Conference. In prior years we historically spent 20 to 25 percent of our audit budget on planning. Audit planning now comprises approximately 35 to 40 percent of the total budget.Audit plan relates to preparations made by the auditor for one specific audit engagement.
While audit planning memorandum is a standing arrangement made by the auditor for the continuing engagement of a particular client.
Hence, an audit plan for the audit of. Audit Planning Memorandum Introduction: This memorandum sets out our proposed strategy for auditing the Karnataka State Khadi and Village Industries Board (KVIB) for the year ended 31 March Background of the entity: KVIB is a Statutory Board established by an Act of the State Legislature.
What is the purpose of audit planning if the audit may not ultimately follow the carefully thought out plan? As may be inferred from Dwight D.
Eisenhower's words—"Plans are worthless, but planning is everything"—the value of audit planning is not derived solely from the resulting audit plan.
Once planning is complete, a written internal audit plan should be developed and communicated to management.
The plan should include background information; a summary of the risk rating methodology and staffing allocations; and audit plan details. Effective planning of an audit is essential to ensure that auditors focus on the areas of greater risk and carry out their audits efficiently.
This section has support tools to assist you in achieving audit objectives. Audit Planning Audit planning includes deciding on the overall audit strategy and developing an audit plan. Auditing Standard No. 9 from the PCAOB describes an external auditor's responsibility and the requirements for planning an audit.